European natural gas is headed for a third consecutive week of increases

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European gas prices are on course for their longest streak of weekly gains this year, as a prolonged shutdown of Freeport LNG, a key US export facility, further tightens a market already reeling from Moscow’s supply cuts.

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As Bloomberg reports, futures for the European benchmark rose as much as 6.1% and are heading for a third week of gains.

Next-month futures for Dutch natural gas, the European benchmark, were last seen trading 3.1% higher at 148.99 euros shortly after 11am Greek time. They earlier hit their highest daily level since March 10.

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Freeport LNG will partially restart operations in October, a month later than previously expected. This will put further pressure on European companies and governments to secure enough supply to fill storage in time for winter, while still fighting the risk of blackouts.

Europe has been in the middle of an energy crisis for months, which is playing a huge role in slowing economic growth and increasing inflation. Russia has cut shipments through a major pipeline by 60 percent, and the link is scheduled to be shut down entirely this month for maintenance. Germany has expressed doubts that Nord Stream will continue to supply after the work.

The Freeport, Texas facility was shut down in early June after an explosion. It exports 15% of all US exports, including to Europe. Before the facility can resume normal operations, Freeport must take a series of corrective actions and provide weekly updates, according to a federal announcement Thursday. Full production is likely to return only by the end of the year, the project operator said.

Supply risks are spreading across the European economy and putting increasing pressure on traders and utilities, increasing their funding requirements. German energy giant Uniper SE is seeking a government bailout as it has been forced to buy more expensive gas on the spot market to cover a shortage from Russia.

Source: Capital

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